Ensuring Workplace Fairness Is Not Expensive

America’s Small Businesses Say ENDA-like Policies Have Minuscule or No Costs

By Crosby Burns and Jeff Krehely
Posted on October 12, 2011, 9:00 am

Last week, the Center for American Progress released initial findings of a poll that shows a majority of small business owners support policies that shield gay and transgender employees from discrimination.[1] In addition to demonstrating their support for workplace fairness, a majority of small businesses also report no costs associated with implementing and maintaining nondiscrimination policies based on sexual orientation and gender identity.

The poll showed that 63 percent of small business owners support the Employment Nondiscrimination Act, or ENDA, a federal law that would prohibit public and private employment discrimination against gay and transgender workers. This support among the small business community mirrors the public’s support for ENDA. A CAP poll from June 2011 shows that three out of four (73 percent) likely 2012 voters also support legislation to combat discrimination against the gay and transgender workforce, including clear majorities of self-identified independents and Republicans.

Other data and research show that ENDA is sorely needed. Gay and transgender employees continue to face alarmingly high rates of discrimination in the workplace, as CAP has written about in the past. Unfortunately, our polls show that 89 percent of likely voters erroneously believe that gay and transgender Americans already have federal employment protections, as do 89 percent of small business owners. Some states have laws that offer these protections, but in most states it is perfectly legal to fire someone for being gay or transgender. Until Congress passes ENDA, discrimination will continue to force otherwise qualified employees out of work simply based on their sexual orientation and gender identity—factors completely irrelevant to performance on the job.

Despite the widespread support and the pressing need for federal legislation, conservative opponents of workplace fairness continue to propagate misleading and often false claims about ENDA, including the erroneous claim that it imposes burden and costs on our nation’s small businesses.

Case in point: Senate Minority Leader Mitch McConnell (R-KY) told a constituent in August 2010 that ENDA “would impose significant regulatory burdens and costs on small businesses.” Similarly, Focus on the Family sent a letter to members of the House of Representatives in September 2009, which falsely claims that “ENDA will…increase compliance costs for businesses—costs that small business can ill-afford, particularly during this economic downturn.”

It is unknown where these conservatives are finding these facts that are devoid of hard numbers. But they are certainly not looking to small business owners themselves, the vast majority of whom report absolutely no costs associated with gay- and transgender-inclusive nondiscrimination policies. The companies that did cite costs also noted that they are negligible, usually representing less than 1 percent of annual operating costs.

Implementing nondiscrimination policies

Sixty-seven percent of businesses with sexual orientation nondiscrimination policies said there were no costs associated with implementing those policies.

Only 25 percent said there were costs, of which most (65 percent) said those costs represented less than 1 percent of annual operating costs. Nine percent did not know either way.

Maintaining nondiscrimination policies

Eighty percent of businesses with sexual orientation nondiscrimination policies said there were no costs associated with maintaining those policies.

Only 12 percent said there were costs, of which most (68 percent) said those costs represented less than 1 percent of annual operating costs. Eight percent did not know either way.

Looking at the 69 percent of small businesses that already prohibit discrimination against gay employees, 67 percent said there were zero costs associated with the initial inclusion of sexual orientation within their nondiscrimination policies. But of the 25 percent of companies that said there were costs associated with implementation, 65 percent said those costs represented less than 1 percent of annual operating costs. Nine percent said they did not know if there were implementation costs associated with these policies.[2]

Even fewer of these small businesses cited costs associated with maintaining their company’s sexual orientation nondiscrimination policy in the medium and long term. Eighty percent said there were no costs associated with maintaining their policy prohibiting discrimination against gay workers. Only 12 percent said there were costs associated with its maintenance. Looking at just this 12 percent, 68 percent said those costs represented less than 1 percent of annual operating costs. Eight percent said they did not know if there were maintenance costs associated with these policies.

Transgender-inclusive policies are similarly inexpensive. Looking at the 62 percent of small businesses that already prohibit discrimination against transgender employees, 68 percent said there were no costs associated with the implementation of this policy. Of the minority of businesses that said there were costs (22 percent), 76 percent said those costs represented less than 1 percent of annual operating costs. Eleven percent did not know if there were implementation costs associated with these policies.

Small business owners also report zero or insignificant costs associated with maintaining their policy against gender identity discrimination. Seventy-six percent said there were no costs associated with maintaining their policy prohibiting discrimination against transgender workers. Only 14 percent said there were costs associated with maintaining this policy. Of that group, 86 percent said the maintenance cost represented less than 1 percent of annual operating costs. Ten percent said they did not know if there were maintenance costs associated with these policies.

The results are clear. An overwhelming majority of small business owners report no or very small costs associated with gay- and transgender-inclusive nondiscrimination policies.

But what about those small businesses that do not have these policies on their books? Do they cite costs as a reason for not having inclusive nondiscrimination policies? Of those small businesses that do not prohibit discrimination based on sexual orientation, only 2 percent said costs deterred them from offering protections to gay employees. Only 4 percent cited costs as a deterrent to prohibiting discrimination on the basis of gender identity.

Most of these businesses said that they simply never thought to adopt these policies or that they did not have gay or transgender employees currently in their workplace. Costs, however, were not a factor.

Nevertheless, conservatives will continue to falsely assert that ENDA and similar policies will heap unnecessary costs onto our nation’s small businesses. They are wrong. When ENDA is eventually passed, it will simply ensure that no one is forced out of a job simply because they are gay or transgender.

ENDA has recently been introduced in both the Senate and the House of Representatives. With likely voters and small businesses exhibiting strong support for workplace fairness, Congress should pass this law, and pass it immediately.

Crosby Burns is Special Assistant for LGBT Progress and Jeff Krehely is Director of the LGBT Research and Communications Project.